Idaho insurance exchange official quits as his company wins contract — from the exchange

Here’s a story of out of Idaho about a board member of that state’s health-insurance exchange whose company got a no-bid contract from — wait for it — the health-insurance exchange.

Nice work if you can get it?

Oh, he quit the exchange the same day the exchange awarded his company the contract worth up to $375,000.

By John Miller
The Associated Press

BOISE — A board member of the Idaho health-insurance exchange quit Wednesday, the same day the exchange awarded his company a no-bid contract worth up to $375,000.

Frank Chan resigned from the Your Health Idaho board to avoid the appearance of “conflict of interest,” board members said. Chan’s company, Boise-based Applied Computing, will serve as the exchange’s information-technology consultant.

Earlier this year, Chan was appointed by Gov. C.L. “Butch” Otter to help oversee the Internet marketplace created under President Barack Obama’s health care overhaul. It allows people to shop for insurance and learn if they qualify for federal subsidies. He had been technology chairman of the 19-member volunteer board.

Chan will now earn $180 an hour to oversee the exchange’s technology vendors as it works to replace a glitch-filled federal software system with one that’s state-based by next year. The exchange is seeking a $50 million, taxpayer-funded grant from the federal government to pay for that project.

Amy Dowd, Your Health Idaho executive director, said Thursday that she gave Chan the contract without advertising it under an “interim procurement policy.” The policy hasn’t gotten final board approval, but it allows her to quickly sign contracts without seeking potential interest from other vendors, she said.

“This is my direction from the board, to operate under this procurement policy,” Dowd said. “Unfortunately, we don’t have the luxury of time. I believe Frank is the best, based on our timeline. Applied Computing is best positioned to help the exchange right now.”

Dowd said the governor’s office was informed of the deal.

Chan didn’t immediately return a phone call seeking comment. His company already does business with the Idaho Department of Health and Welfare.

Generally, Idaho requires public contracts that exceed $25,000 to be awarded competitively.

Idaho’s Legislature this year required the exchange to solicit bids but then exempted it from state procurement rules, allowing its leaders to largely set its own policies on deals with private vendors.

So far, the exchange’s interim procurement policy doesn’t name a value for contracts that would generally trigger a competitive bidding requirement. In May, the board said it intended to establish those thresholds with Dowd’s help, but so far, it hasn’t happened.

The policy is still in draft form, according to a copy provided to The Associated Press.
Stephen Weeg, Your Health Idaho board chairman, conceded that Chan’s contract terms weren’t vetted by the board or advertised publicly.

Still, Weeg insists striking the deal swiftly was important because the exchange must meet key deadlines to have its state technology system in place by next October. It’s aiming to replace the glitch-plagued federal system that has bogged down enrollments since Your Health Idaho launched Oct. 1.

“We’re operating under an incredibly tight time frame,” Weeg said. “Because of his (Chan’s) skills and because of his interest, this is the person who can help make this succeed.”

Other board members were caught flatfooted by Chan’s resignation and his company’s contract award.
Board member and state Rep. Kelley Packer, R-McCammon, said Wednesday’s announcement was the first she’d heard of it.

“I was surprised,” Packer said Thursday. She said she neither knew he had resigned nor that he was bidding on a proposal.

About the blog

HealthCare Checkup is a new blog dedicated to helping readers understand the Affordable Care Act and how the federal health-care law affects everyone – insured or not. Reporters in Seattle, Olympia, and Washington, D.C. contribute. The editors are Beth Kaiman and Mark Watanabe.

The blog is produced through a partnership with Kaiser Health News, an editorially independent part of the Kaiser Family Foundation, a health policy research and communication organization that is not affiliated with Kaiser Permanente.